In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Tag: Election

The victory of the secular party Call of Tunisia (Nidaa Tounes) in the parliamentary election on Sunday carries two lessons for observers of transitions in the Middle East and North Africa (MENA). The first one is broadly optimistic, but the second one should be a cause for concern, heralding economic, social, and political troubles ahead.

1. The Arab Spring was not a one-way street to religious fundamentalism.

In spite of the unexpected and often violent turns that political events have taken in countries such as Syria or Libya, the revolutions across the MENA countries were not just thinly disguised attempts to impose theocratic rule on Arab societies. While Islam is an important cultural and social force, most people in the region have little appetite for a government by Islamist extremists. In fact, much of the headway that Islamist politicians made shortly after the fall of authoritarian regimes in the region can be explained by their track records as community organizers or providers of public services.

Tunisia is a case in point. Already in 2011, the country’s leading Islamic party, Ennahda, featured numerous women candidates in the election, and following a political crisis last year it negotiated a peaceful handover to a caretaker government that led the country to yesterday’s election.

Tunisia’s new leading political force, Nidaa Tounes, may have gained as many as 80 seats in the 217-seat parliament. It describes itself as a ‘modernist’ party. It unites secular politicians of various stripes, including labor union members, or former officials of the regime of president Zine el-Abidine Ben Ali. The leader of the party, the 87-year old Beji Caid el-Sebsi (who served as interim prime minister in 2011) had a long political career prior to the revolution, including an ambassadorship in Berlin after Ben Ali’s ascent to power.

2. Don’t expect radical economic reforms.

For those who feared that democratization in the MENA region could bring about theocracy and extremism, the status-quo nature of Nidaa Tounes is probably good news. At the same time, however, it seems unlikely that the party, whose sympathizers largely overlap with those of the country’s influential labor unions, will bring about the deep institutional and economic changes that Tunisia needs in order to extend access to economic opportunity to ordinary Tunisians by dismantling Byzantine red tape and corruption and freeing up its economy.

For example, while it is certainly praiseworthy that the party has promised to improve the economic situation of women, one should worry that it plans to do so by what are likely to be popular yet ineffective measures: creating a new government bureau fighting discrimination, investing in social housing for young female workers, and extending statutory maternity leave.

More importantly, in many areas the exact economic platform of Nidaa Tounes remains blurry. The party promises to foster consensus among the government, civil society, labor unions, and employers. It also promised to cut public spending – in part by reforming the system of fuel subsidies – increase industrial exports and promote industries with high value added, most notably hi-tech and renewable energy, and to subsidize economic development in poorer regions by an amount of 50 billion dinars ($28 billion) over the next five years, 30 billion of which would be coming from the public budget.

Heavy on clichés and light on specifics, these promises are reminiscent of electoral manifestos of social democratic parties of Europe. Regardless of whether that would be a good thing under normal circumstances, what Tunisia needs now is a bold agenda of economic liberalization, as well as a Leszek Balcerowicz-like figure to implement it. With a mushy economic program and Mahmoud Ben Romdhane – former deputy head of Tunisia’s ex-communist party, Ettajdid –as the key economic policy figure on the party, Nidaa Tounes offers neither.

The upcoming parliamentary election in Tunisia comes at a critical time. For a while, Tunisia was seen as a poster child for a successful transition away from authoritarianism. In Egypt, a widespread disappointment with an Islamic government resulted in a military coup last year. In contrast, when Tunisia could not get through a political impasse, the Islamic Ennahda party negotiated a handover to a caretaker government earlier this year, which has led the country to an early election.

Regardless of whether Ennahda can repeat its electoral success from three years ago or whether secular forces take over, the new Tunisian government will be in an unenviable position: it will have to address a growing security crisis in the country. In the past two years, the country has seen the emergence of political violence and terrorism perpetrated mostly by radical Salafist groups. Those violent efforts include the killings of two opposition politicians, Chokri Belaid and Mohammed Brahmi, as well as a car bomb plot foiled just last week.

Tunisia has also become a fertile ground for the recruitment of fighters of the Islamic State (ISIS). Some estimate that over 2,400 ISIS fighters are from Tunisia, which would make Tunisians the most numerous nationality fighting for ISIS. Restoring basic security, order, and rule of law—and preventing the country from descending into a full-fledged internal conflict—will have to be a priority for the new government.

The political violence may have multiple roots, but Tunisia’s poor economic performance is clearly one of them. In recent years, many strikes and protests over economic conditions have taken a violent turn and led to attacks on local police stations, for example.

While the West is confronted with problems posed by aging populations, Tunisia, like other countries in the region, faces the challenge (and opportunity) of harnessing the economic potential of an extremely young workforce. Practically half of Tunisians are under the age of 30, and many of them are struggling. Although unemployment is slowly falling, the unemployment rate among university-educated young Tunisians is over 30 percent, making their situation precarious.

Just over a week ago, Swedes threw out the relatively pro-market coalition that had goverened the country for the past 8 years, handing power (though not an outright majority) to a new left-of-center coalition. Swedish students’ falling scores on international tests were a key cause of public dissatisfaction, and they have been widely blamed on a nationwide voucher-like school choice program introduced during the early 1990s. But as I point out in an op-ed in yesterday’s Svenska Dagbladet, the facts simply don’t support that narrative. Here’s the English draft of the op-ed:

Sweden’s collapsing performance on international tests was clearly a factor in the recent election, and redressing that slide will be a priority for the new government. A good first step in charting the way forward is to understand what has gone wrong and what has gone right in the past. Unfortunately, the most popular narrative about Swedish education trends is badly mistaken.

Many have blamed Sweden’s falling international test scores on the proliferation of free schools, merely because the decline is thought to have followed their large-scale expansion. This would be a common logical fallacy even if the timing were correct—but it isn’t.

Between 1995 and 2011, Swedish math scores on the Trends in International Mathematics and Science Study (TIMSS) fell by a massive 56 points. But the vast majority of that decline—41 points—had already taken place by 2003. In that year, 96 percent of Swedish students were still enrolled in government schools.

Another international test, the Programme on International Student Assessment (PISA), began in the year 2000 and has the advantage of breaking out the scores for government and private schools. The last PISA test was administered in 2012, by which time government school scores had fallen by 34 points while free school scores had fallen by only 6 points.

Anders Böhlmark and Mikael Lindahl’s long-term nationwide study helps to explain these trends: increased local competition from free schools actually raises the performance of students in both sectors—on both national and international tests. But, since free schools still enroll a small fraction of students nationwide, the benefits of this competition have yet to be felt in many areas.

Of course, none of this is to suggest that there are no bad private schools. There has never been an education system in history capable of producing only good schools. The best that can be hoped for is that unsuccessful schools close while good schools expand. And that is precisely what has been happening in Sweden.

Much has been made of the failure of JB Education, which attracted too few students to remain financially viable, and was forced to shut down. This was regrettable for everyone directly concerned, in the short run. In the long run, it is better than any realistic alternative. In most countries, including the United States, atrocious government-run schools are able to continue operating indefinitely because they face no meaningful competition—the poor parents they most often serve simply cannot afford any alternative. These schools are numerous enough that a term has been coined to describe them: “dropout factories.” Swedish families are lucky that they can far more easily escape such schools.

Not only does the Swedish system pressure failing schools to close, it encourages good ones to expand. International English Schools is one of the highest-performing school networks in the country, even after controlling for the parental level of education and immigrant background of its students. It is also one of the fastest growing, now operating 25 schools serving nearly 18,000 students. IES has plans to continue growing so long as demand for its services remains unmet. But if IES’s emphasis on academics and civil classroom behavior seems too traditional for some families, there are many other options to choose from. Another large and successful network is Kunskapsskolan, which allows students to proceed through the curriculum at their own pace, combining tremendous student autonomy with weekly one-on-one meetings with teachers.

But not all good private schools grow. Specifically, non-profit schools tend not to build large networks, no matter how good they are. As a result, thousands of students who might benefit from their services never get the chance to do so. The only good schools that consistently “scale-up” in response to rising demand are those operated as for-profit enterprises. This is not a coincidence. Building a network is both risky and expensive. The profit-and-loss system provides both the resources and the incentives that allow and encourage successful enterprises to grow.

Sweden is fortunate to have harnessed that system to spur the growth of its high performing schools. Chile does the same thing, and has become not only the highest-performing nation in Latin America but also one of the fastest-improving countries in the entire world on international tests. If Sweden wishes to become a fast-improving nation educationally, the evidence strongly supports preserving the entrepreneurial freedoms and incentives that promote the growth of successful education networks.

Californians approved Prop 30, a $6 trillion dollar tax hike intended to save public schools from “devastating” cuts. In fact, the state is already spending around $30 billion more today on public schooling than it did in the early 1970s, after controlling for both enrollment growth and inflation—and SAT scores, the only academic outcome measure going back that far, are down. Prediction: this $6 billion will have little impact on children’s education even if it does make it to the school level. Instead, it will further slow California’s economy and drive a few more businesses out of the state.

Washington becomes the 43rd state to adopt charter schools. Initiative 1240 caps the state-wide charter school count at 40 over the next five years, however, so it will have little short term impact. If the charter cap is expanded before Washington state levels the financial playing field for private schooling through a tax credit program like Georgia’s, the existing independent education sector in the state will be largely consumed by the competition from new “free” charter schools.

High profile Indiana state schools superintendent Tony Bennett has been defeated by his rival Glenda Ritz. Ritz not only opposes the statewide voucher program championed by Bennett, she is among the plaintiffs in a lawsuit to overturn it. Indiana’s voucher legislation accords the state department of education the power to adopt rules and regulations pertaining to its implementation, including determination of students’ eligibility to receive vouchers. If Ritz does not use these powers in an attempt to hobble and curtail the program, I will be shocked.

The political balance in New Hampshire’s legislature has shifted toward Democrats strongly supportive of the educational status quo. This raises the possibility that there will be efforts to cripple or repeal a K-12 scholarship donation education tax credit in that state. Though the program is quite small, it was among the best-designed in the country and it would be an unfortunate turn of events for low-income children in that state if the program is killed.

None of these developments or possible developments are likely to derail the growing interest in expanding educational freedom in America as a whole, but they do suggest that reformers have more work to do in educating themselves and the public about what works and what doesn’t in education policy.

The conventional wisdom is that the United States is a center-right country while Canada is a center-left one. Yet, even as the most-left-wing president in history occupies the White House, last night the Conservative Party of Canada – which had already been steering its ship of state in a fiscally prudent direction despite only having a plurality of seats in Parliament – won a decisive victory. Prime Minister Stephen Harper will thus lead the first first majority government by any party since 2004 (after the first election creating a majority government since 2000).

How can this be?

The answer comes down to three main factors:

Electoral system. Canada has a multi-party first-past-the-post parliamentary system that currently features one united center-right party and an opposition split among two major left-wing parties, Quebec separatists, and a not-inconsequential Green Party. Thus, the Tories’ 40% of the popular vote (up 2% since the 2008 election) translated to 166 of the 305 seats in Parliament (a gain of 23). Recall that John McCain won 45.7% of the vote in the 2008 presidential campaign.

Timing of terms of office. If President Obama had run for re-election yesterday – well, maybe not yesterday, the day after announcing the end of Osama bin Laden – he might very well have lost (depending on the vagaries of the electoral college and who the GOP ran against him). As it was, of course, the Republicans did win big in the 2010 midterms and stand to do so again in 2012 regardless of the result of the presidential election. Also, one of the themes of this year’s Canadian election was that the opposition forced an election that Canadians “did not want” and considered to be a waste of money.

Leadership/personality. Barack Obama was a singular individual at a unique time (financial collapse, Bush fatigue, etc.). The leader of the Liberal Party of Canada, meanwhile, former Oxford and Harvard professor Michael Ignatieff, who hadn’t lived in the country for 30 years before entering Parliament in 2006 (see the Conservatives’ hilarious and devastating attack ads), was a wooden campaigner who failed to connect with the average voter.

And so, even as 60% of Canadians voted for a party other than the Conservatives – 31% New Democrats (socialist/labor), 19% Liberal, 6% Bloc Quebecois (separatists), 4% Green – they will have a Tory majority government until (probably) October 2015. Given that social issues don’t play much of a role in Canadian public affairs, this is generally a good result for friends of liberty. Now that he has his majority, we’ll see how much more Prime Minister Harper moves in the free-market direction he has long said he would if given the opportunity.

For those interested in more than that basic synopsis and US/Canada comparison, read on below the fold.

Here are a few other tidbits from Canada’s 41st federal election:

The Conservative Party

Won a majority based almost exclusively in Ontario (72 seats) and the West (also 72 seats), a feat – i.e., winning without Quebec – heretofore thought impossible.

Won 30 of 44 seats in the Greater Toronto Area (GTA), including my former riding of Eglinton-Lawrence (where my dad still lives and which has been a Liberal seat since its inception in 1979) and Ajax-Pickering, picked up by former ambassador-to-Afghanistan (and youngish alum of my high school) Chris Alexander. Such a strong performance in the 416 and 905 area codes – as the central and suburban parts of the city are labeled – was unexpected, to say the least, and is being attributed to successful courtships of so-called New Canadians (especially Asians) and a strong pro-Israel position.

Won 27 of 28 seats in Alberta, 13 of 14 in Saskatechewan, and 11 of 14 in Manitoba, painting the West blue.

The New Democratic Party

The NDP won a record 31% of the vote (up 13% from 2008) and 102 seats (a gain of 65), for the first time becoming the Official Opposition.

Of those 102 seats, 58 are in Quebec, up from 1 (one!) going into the election. Thus, the Official Opposition is essentially a Quebec-based group.

The NDP leader, and therefore Leader-elect of the Opposition, is former Toronto city councillor Jack Layton, who, the media discovered three days before the election, had in 1996 been found by policy lying naked in a “bawdy house.” Layton explained that he was just getting a shiatsu massage.

The party had some other colorful characters unexpectedly elected to Parliament, including a former(?)-Communist karate instructor, a cocktail waitress elected in Quebec who doesn’t speak French and went on vacation to Las Vegas during the election, and at least one college student.

The Liberal Party

The Liberals, the longtime “natural party of government,” were decimated, reaching record lows of 19% of the vote (down 7% from 2008) and 35 seats (down 32).

Liberal leader Ignatieff lost his own seat, setting up a leadership race between Bob Rae, former premier of Ontario (as a New Democrat) and Justin Trudeau (son of the late prime minister Pierre Trudeau, considered by many Baby Boomers Canadians to have been Canada’s JFK).

The Bloc Quebecois

The Bloc were utterly defeated, losing 40% of their vote, all but four of their seats (down from 49), and “official party status” in Parliament (important procedurally and also for public funding formulas).

Bloc leader Gilles Duceppe, the first MP elected under the Bloc banner (others had “crossed the floor” from other parties), also lost his own seat, and promptly resigned the party leadership.

The conventional wisdom is that most Bloc voters were social democrats and so, tired of flogging the one-issue separatist horse, moved their anti-Conservative voices en masse to the NDP. Maybe. If this were any other province, probably. There are, however, plenty of nationalist, separatist conservatives here (perhaps better described as populists), so it could be that, as usual, Quebeckers voted in a way they thought would maximize their power and autonomy within the federal system.

The Green Party

Although the Greens lost nearly half their popular vote (down from 7% in 2008), they did manage to elect their leader, Elizabeth May, in a British Columbia riding previously held by a Tory cabinet minister. How a seat can swing from Conservative to Green is beyond my ken, but this is the first Green seat ever in Canadian history.

“It’s a survey of the type of kids who run for student government and choose to spend their summer vacations working in Washington,” the authors explain, “youth who already have the ‘Washington bug’ and have set themselves towards a career in politics and policy.” In other words … creeps!

If you’re the rare bird who favors limited government at home and abroad, you can hardly expect good news from a poll of this generation’s Tracy Flicks*. After all, aren’t these just the sort of model U.N. types who’ve always wanted to run the world?

When given a list of possible foreign policy actions and asked to prioritize them, our precocious politicos put “build a stronger military force to ensure deterrence” near the bottom. Moreover, nearly 58 percent of these “young leaders” agreed with the statement that “the U.S. is too involved in global affairs and should focus on more issues at home.”

Only 10 percent “thought that the United States should be more globally proactive.”

I’ve read a lot of polling data on the Millennials’ politics, and, from a libertarian perspective, they’re a mixed bag. On the plus side, they’re socially liberal, and totally uninterested in culture-war politics. On the minus, they exhibit higher levels of faith in government than do older generations, leading the Center for American Progress to call them “The Progressive Generation.”

But if, as the Brookings survey suggests, even GenY’s model-UN types don’t want to run the world, then the future looks less bright for neoconservatives than it does for libertarians.

* reference is to the Greatest Political Movie of All Time, 1999’s “Election”: